Lines likened himself to the Mayor of Paris, promising direct action to beat the recession.
But furious colleagues denounced both the mayor and Lines's plan as "socialist" and warned that such protectionist behaviour would backfire.
One senior backbencher said: "A number of people expressed grave concern about attempting to give special protection to Brummie firms.
"The fear is that other local authorities would retaliate and companies in Birmingham would find themselves unable to sell goods to the likes of Manchester, Liverpool and Leeds councils."
There was also a lively row about the proposed municipal bank, which is opposed as a waste of money by a quarter of the Tory group
And in an embarrassing challenge to council leader Mike Whitby, the backbench rebels are demanding certain guarantees in return for future loyalty.
At the top of their list is the formation of a formal committee, which would elect its own officers and exist to act as a link between the backbenches and the leadership. The idea is to replicate the Conservatives' 1922 Committee - known as the men in grey suits, which can often make or break party leaders.
The rebels, who include former Lord Mayor Randal Brew, have not dismissed the nuclear option if they don't get their own way.
A challenge to Mike Whitby as Tory group leader is unlikely, but deputy group leader Len Gregory is seen as highly vulnerable.
It is entirely possible that next month's annual Conservative group meeting will see Gregory fighting to keep his position.